Gold at Crucial Trading Zone – Time to Decide Long Term Trend! - Forex News by FX Leaders

Gold at Crucial Trading Zone – Time to Decide Long Term Trend!

Posted Monday, August 28, 2017 by
Arslan Butt • 1 min read

As I mentioned in my earlier update, it was a good idea to close our long term sell before the Jackson Hole symposium as the unpredictable volatility caused so much trouble for both bulls and bears. Now, the gold is holding at a very crucial stage. It's time to plan for the long term.

Gold – Key Technical Drivers 

The gold is still trading in a bullish channel. We can see in the below chart, gold prices are now trading above $1294, after testing the lower edge of the bullish channel.

50- periods EMA is providing a support at $1286 (4H Timeframe). Keep in mind that the gold has broken above the double top resistance level of $1297. To make sure that it's really broken, we need to wait for today's closing.

Gold - Bullish Channel - 4 Hours Chart Gold – Bullish Channel – 4-Hour Chart

RSI Stochastic is holding in the selling zone (below 50), signaling that the gold has the potential for further buying. But, on the 4-hour time frame, it's massively overbought.

Now if gold stays below $1301, we are likely to sell a strong sell until 1280 – 1270. Whereas, above 12301-04 the yellow metal will enter the new bullish trading region of $1300 – $1325.

Gold Trading Plan

I'm looking to enter a sell position at $1304 with a stop loss above $1307 and take profit at $1291 and $1285. The trade setup will be more clear with time as we have US labor market figures by the end of the week. Till then, it's recommended to use small trading volume with risk management.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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